FRANKFURT, Nov 12 (Reuters) - Key euro-priced bank-to-bank lending rates dipped on Friday, shrugging off renewed debt fears and as markets continued to ask whether the ECB will press on with withdrawing its lending support in the new year. Benchmark 3-month interbank rates have risen around 20 percent since banks slashed their consumption of ECB funding in a string of key lending operations at the end of September. Banks again scaled down borrowing after the ECB's final 6-month loan expired on Thursday. Nevertheless, the three-month Euribor rate -- traditionally the main gauge of unsecured interbank euro lending and a mix of interest rate expectations and banks' appetite for lending -- dipped back from a 16-month high to 1.049 percent. Shorter-term one-week rates also dropped, falling to 0.806 percent from 0.807 percent. Longer maturities moved in the other direction. Six-month euro rates edged up to 1.276 percent from 1.275 percent, while 12-month rates remained at 1.546 percent. Overnight rates dipped to 0.805 percent on Thursday. Excess euro zone liquidity currently stands at just over 50 billion euros according to Reuters calculations, although it is set to shrink further after Thursday's smaller-than-expected take up of funding by banks. The 3-month Euribor rate broke above the European Central Bank's 1.0 percent benchmark rate last month for the first time in well over a year, marking a milestone for money markets. Bank-to-bank 3-month lending rates traditionally sit just above the ECB's headline rate, but the ECB's tactic of lending out unlimited cash during the financial crisis had long kept them well below the benchmark rate. The ECB held official euro-zone rates at 1 percent for the 18th month running last week. ECB President Jean-Claude Trichet also welcomed the recent improvements in money markets and said the bank would announce in December before whether it plans to press on with scaling back its support measures. ECB watchers currently expect the bank to stop lending 3-month money in unlimited quantities in January and return to competitive auctions although woes in the euro-zone's debt-choked periphery continues to cast a dark cloud over money markets. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For graphic of EONIA trading volumes click http://graphics.thomsonreuters.com/F/08/EZ_EONIA0810.gif For graphic of euro zone liquidity levels click http://r.reuters.com/wer86p ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Euribor rates are fixed daily by the Banking Federation of the European Union (FBE) shortly after 1000 GMT. * For a table of the latest Euribor fixings for terms of one week to one year, double click on * For a table of the previous day's fixings of EONIA swap rates, which show market expectations for future overnight lending rates, double click on * For graphs of historic Euribor and EONIA swap rates, right click on the links in angle brackets below, and select 'Related Graph' 1 week 2 week 3 week 1 month 2 month 3 month 4 month 5 month 6 month 7 month 8 month 9 month 10 month 11 month 1 year (Reporting by Frankfurt newsroom) Keywords: MARKETS EURIBOR/ (email@example.com; +49 (0)69 7565 1209) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.
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